TL;DR at bottom.
Ok so we all know that the fuckery around things like shorts and stuff are bad. But let’s just forget about all sorts of financial instruments which derive their value from stocks. In other words, let’s forget about “derivatives” such as options, swaps, shorts, etc. Let’s just say that tomorrow all this other shit will be banned. So now we’re back to simple buying and selling of stocks (shares) in companies.
Now, why in the world would a person want to own a stock? There are only two fundamental reasons in my opinion.
- You want to trade in stocks.
- You want to buy a stock and collect dividends.
Let’s tackle these one by one.
- You want to trade in stocks.
Why do you want to do this? I’ll tell you why. You want to buy a stock at a certain price and then sell it later for a higher price, thus making a profit. Sounds good right? How can there be a problem with this? It’s simply buying and selling like people buying Pokemon cards right?
Well here’s the fundamental problem with that: THERE’S ALWAYS A SUCKER AT THE END OF THE CHAIN. What I mean by this is that Person A buys a stock and sells it to Person B at a higher price. Person B bought it so that they could sell it at an even higher price than what they bought it for. So they sell to Person C, who also wants to sell it for a higher price at a later date. Do you see now? THIS CHAIN NEVER ENDS. There is always someone at the end who’s holding the bag and hoping for another sucker to come along. What kind of system depends on people hoping for the next sucker in line? Sounds like a Ponzi scheme to me.
It should be pretty clear that this is a bad reason to trade in stocks, from the viewpoint of society. It promotes a ‘dog eat dog’ right-wing mindset that’s all about “getting yours” at the expense of others… REACTIONARY
- You want to buy a stock and collect dividends.
Now you might say that this is more “noble” and “upright” than the shifty person who only wants to buy low and sell high. Perhaps in that sense you’re not a stereotypical middle man, but that doesn’t mean what you’re participating in is somehow better. You see, when you own a stock, in a sense you’re a “part-owner” in that company. The more shares you own, the more “ownership” you have, so to speak. (Obviously this is complicated by the fact that simply owning a share of doesn’t entitle you to make company decisions, as this depends on the type of share and all that BS, but my point remains the same.) Thus as a “part-owner” you are typically entitled to a small portion of the profit of the company you own stocks in. The more stocks you own, the more little bits of profit you receive. These are known as “dividends.” Some people don’t buy stock in order to sell it later: they simply own it because they want to collect dividends (kind of like landlords tbh).
“So what’s wrong with that?”, you may ask. Well, I’ll tell you. How does a company make profit? By squeezing as much productivity as they can out of their workers. By “downsizing” (i.e. firing) their workers. By dumping chemicals into rivers because it’s cheaper than properly disposing of them. By using child labor overseas for pennies on the dollar. By influencing politicians to intervene in foreign countries by funding fascist death squads that slaughter innocent people. By extracting wealth not only from your own country, but from other countries. By lobbying to classify you as an “independent contractor” or find other ways to suppress your wages. And on and on… By the way, under our current economic/political/legal system, companies only have one primary goal: to maximize profits for their shareholders. They do this at the expense of all else! So say goodbye to “ethical” companies.
So that nice little “dividend” that you get because you own a share is basically blood money. You may not be that sleazy wall street bro (who is basically a glorified middle man), but you are still COMPLICIT IN EXPLOITATION. Even if it’s just your retirement 401k, it’s being upheld and bolstered by exploitation. And when your retirement is threatened, you’re gonna side with some “unsavory” elements in order to protect it… REACTIONARY
Summary
So even if all derivatives like shorts were banned, simple trading of stocks is also bad.
TL;DR People only really buy/sell stocks for two reasons, both of which are bad:
- You buy in order to sell high later ==> Ponzi scheme.
- You buy to collect dividends ==> exploitation
BRB destroying capitalism by boycotting it
Well. I think you don’t understand what stocks are. Stocks are basically a a way company can raise money without the requirements of repayment or interest that would normal occur if the company had to take out a loan. Every stock starts as an initial public offering, this is where, in the simplest terms, the company sell shares of ownership to the general public in hope to raise capital. When you trade a stock after a IPO, you are just trading a investment that someone else made. However, stocks don’t necessary entitle you to the assets of the company. I find it kinda funny, but all early stocks paid dividends. Most companies don’t do this anymore.
If you had a cooperative company, this would be a great way to return profits to the workers. Because of inflation and company growth, you would expect any stock from a health company increase.
If you had a cooperative company, this would be a great way to return profits to the workers. Because of inflation and company growth, you would expect any stock from a health company increase.
I would prefer that extra profits would just be given back to employees as a cash bonus. Stock prices aren’t physically linked to a company’s business success/failure so giving an employee a lottery ticket instead of the cash to buy a lottery ticket is kinda sus.
I mean, can’t you argue that shares of a company pretty much grant you a portion of the ownership?
I would prefer that extra profits would just be given back to employees as a cash bonus
Isn’t that what dividends are?
Well… lets go back a bit. I’ve never dealt with a workers coop so I don’t know how they do. But wouldn’t giving some employees more “ownership” through shares than other employees defeat the purpose of being a worker coop? If some employees votes count more than others, that might go against the spirit of a coop. Just looks like recreating the system of a non cooperative workplace where some employees effectively don’t have a say in the workplace.
… Isn’t that what dividends are?
I guess that could be a way to look at dividends. But dividends are taxed differently than regular income and whatever other rules exist around stocks and dividends would apply. So it would be like a cash bonus with extra steps and possibly extra rules/taxes. Just seems like too many extra steps to get earned profits for labor done back into the pockets of the workers.
When you trade a stock after a IPO, you are just trading a investment that someone else made.
Yes, the investment that someone else made was sold to you at a higher price than what they bought for. This just proves my point.
You buy in order to sell to someone else. They do the same. The chain never ends.
It doesn’t have to be at a higher price though. I could buy somebody out of their shares after the share price dropped because they need the cash more than the gamble that prices will rise later.
So that person who you bought it from is the sucker. That pretty much proves my point.
- You buy in order to sell high later ==> Ponzi scheme.
I would argue that “gambling” is the more correct name of what you were describing. Its like having a ticket to a slot machine. Price goes up… do I try to sell… or do I try to wait and see if it goes higher?
Ponzi would be me paying what I owed to somebody to buy stocks with money that you gave me to buy you stocks.
